The insurance business in India isn’t just growing, but also becoming more sophisticated in terms of product offerings. To help readers keep ahead of developments in this business, Mint features a Q&A on insurance every Monday.
I had a stomach ulcer problem a few months back and my life insurance agent asked me not to mention it on the proposal form. But my friend, who works for a life insurance company, said I should disclose it. Whose advice should I accept?
Life insurance is like any other legal contract. Also, it is based on a special principle—the principle of utmost good faith. In case there is any misrepresentation or suppression of any material fact in the proposal form, the insurer could reject your claim.
On the other hand, if you disclose the medical condition truthfully, the insurance company might charge a higher premium to compensate for the higher risk. But you would then ensure the security that you sought to provide for your family. In rare cases, the insurer could postpone or decline your application.
I am 30, and want to invest in a life insurance plan. Is there any plan where I can receive regular money during the tenure of the policy?
You can invest in a money-back plan. A guaranteed money-back plan can help you plan effectively for critical milestones in your life. It not only covers your life, it also assures you a certain per cent of the sum assured as cash inflow at regular intervals.
While choosing the plan, you should look at whether the payment is guaranteed and also, how often the payment is made. So, in case you are seeking income more often, you can choose a plan which pays you a guaranteed monthly income.
Readers are welcome to write in with their queries to email@example.com. The questions will be answered by senior executives from leading insurance firms. This week’s expert is Rajesh Relan, managing director, MetLife.